Mr Putin goes to war for AiRUnion. Russian aviation crisis of confidence leads to mass consolidation
08-Sep-08 This is the Perspective from today's edition of Europe Airline Daily - the comprehensive new pre-digested daily update on strategic news from Europe, saving you time and keeping you right up to date. Complimentary subscriptions to this report are currently available. Register now!
Just as Russian holidaymakers set out to return home late last month, profligate and sprawling airline conglomerate, AiRUnion, was forced to ground flights as it failed to honour long outstanding fuel debts. The political furore created by thousands of stranded tourists was sufficient to cause Prime Minister Vladimir Putin to step in, first slapping the wrist of his Deputy PM and Transport Minister, then directing the state-owned Russian Technologies to fix the problem. Today, the crisis is apparently over, but its resolution will come at a significant cost to state coffers.
Big bailout needed for Air India as losses mount
05-Sep-08 (c) Centre for Asia Pacific Aviation, PREMIUM: Air India confirmed in mid-Aug-08 that it would seek a minimum of INR20 billion (USD458 million) in fresh equity and soft loans from the Indian Government shortly, to fund its increasingly demanding working capital requirements. Chairman & Managing Director, Raghu Menon, stated, “we have not finalised any number [for government support] so far. But it could be more than INR2,000 crore (USD458 million)”. He added, “fares have gone up due to [the] increase in jet fuel prices. We are cutting costs, but the real thing will be [a] fall in fuel prices”.
Demand destruction. More than grazed shins ahead for some airlines
04-Sep-08 This is the Perspective from today's edition of Europe Airline Daily - the comprehensive new pre-digested daily update on strategic news from Europe, saving you time and keeping you right up to date. Complimentary subscriptions to this report are currently available. Register now!
As the price of oil prepares to dive below USD100 per barrel, the global economic slowdown threatens to usher in the next – and potentially more damaging - phase of the airline industry crisis: demand destruction. The International Air Transport Association (IATA) stated yesterday that strong traffic growth allowed the industry to partly absorb the rise in fuel costs from 2003-2007, but likely support from future traffic growth is “no longer the case”.
Demand destruction - enter the next phase of the airline crisis
04-Sep-08 (c) Centre for Asia Pacific Aviation, PREMIUM: Some analysts are now predicting a fall in the price of oil below USD100 per barrel, particularly on the back of Hurricane Gustav’s less-than expected impact on oil installations in the Gulf of Mexico, and this week’s pessimistic growth outlook for developed nations from the OECD.
Boeing machinists explore their options: but this would be the dumbest strike ever
03-Sep-08 (c) Centre for Asia Pacific Aviation, PREMIUM: As Boeing’s machinists walk to their strike vote in Seattle today, there will be those who see this as a historic stand. And that is the problem for management. Boeing is not known for stable and relaxed relations with its engineers, but even by past rocky standards, the present dispute seems hard to understand, at least superficially. That’s because it may well in fact become historic.
Turkish Airlines: becoming a force to be reckoned with
02-Sep-08 This is the Perspective from today's edition of Europe Airline Daily - the comprehensive new pre-digested daily update on strategic news from Europe, saving you time and keeping you right up to date. Complimentary subscriptions to this report are currently available. Register now!
These days, Turkish Airlines’ name seems to appear whenever there is an airline to be bought in Europe. The airline has been suggested as a buyer for Austrian Airlines, Alitalia and, more hopefully, Bosnia-Herzegovina’s B&H Airlines. Continuing – and growing - profitability has allowed these indulgences, as Turkish establishes itself as a frontline carrier. Joining the Star Alliance in April this year has done it no harm and the majority privately held airline links closely to Lufthansa, sharing with the Star leader a 50:50 joint holding in Antalya-based SunExpress (making its bid for Austrian more intriguing).
Arrividerci Alitalia. Bonjour Fralitalia
01-Sep-08 This is the Perspective from today's edition of Europe Airline Daily - the comprehensive new pre-digested daily update on strategic news from Europe, saving you time and keeping you right up to date. Complimentary subscriptions to this report are currently available. Register now!
Last week, as two European airlines – one of them a “flag carrier” – collapsed, few would have noticed a small airline on the other side of the world reporting a profit. It was Polynesian Blue, hardly a major company, but the event was significant in one respect. For many years, the government of tiny south Pacific nation, Samoa, had squandered much of its annual GDP running an inefficient and unsuccessful flag carrier. In October 2005, Australian airline, Virgin Blue, became a 49% shareholder in a new joint venture with the government and took over operations of the carrier. Tourism traffic has increased nearly 50% annually, the airline has repaid an establishment loan from the government and is making money!
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